Crypto:
30253
Bitcoin:
$66.075
% 0.19
BTC Dominance:
%54.0
% 0.46
Market Cap:
$2.41 T
% 1.30
Fear & Greed:
74 / 100
Bitcoin:
$ 66.075
BTC Dominance:
% 54.0
Market Cap:
$2.41 T

Alex Labs Freezes $3.9 Million in Stolen Crypto

Freezing Crypto Coins

On May 16, Bitcoin layer-2 developer Alex Labs announced the successful freezing of over $3.9 million worth of crypto, stolen from its BNB Smart Chain bridge. The funds were intercepted when the attacker attempted to cash out by sending them to various centralized exchanges (CEXs). With the cooperation of these exchanges, Alex Labs managed to freeze the funds, preventing further losses.

Recovery of Multiple Tokens

The team has successfully recovered the complete balances for 17 different tokens, including “all aBTC, sUSDT, xBTC, xUSD, ALEX, atALEX, LiSTX, LUNR, SKO, CHAX, $B20, ORDG, ORMM, ORNJ, TRIO, TX20, and STXS.” Among the exploited funds, $13.7 million worth of Stacks (STX) tokens were targeted. The attacker mistakenly sent “about 3 million” of these STX tokens to CEXs, aiding in their recovery. A total of $3.7 million is now held at exchanges, while $9.6 million remains in the attacker’s control.

Security Breach Details

The exploit occurred when the attacker gained control of a private key linked to one of the bridge’s “vaults.” Despite this breach, Alex Labs confirmed that “the smart contract code and infrastructure underlying ALEX were not compromised.”

Bounty Offer and Future Measures

The hacker is asking for a 10% bounty, but none of the prosecution will pay if he or she returns 90% of the stolen cryptoassets. A police report is in readiness, which will be tracked down following negotiations if they are not successful. Further, the team is also delving into using the $ALEX reserves managed by the Alex Lab Foundation as a “treasury grant program” as part of the reimbursement plan for harmed users.

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Network Upgrade Proposal

With stolen funds already making up the vast majority of the exploited STX tokens, the team could suggest a Stacks network upgrade of the frozen funds and minting new tokens for those harmed. And this way, though occasionally reminiscent of past events like the 2016 Ethereum network hack or the PopcornSwap event on BNB Smart Chain, the result has not always been success in refunding the investors.

Continued Vigilance and Broader Context

Alex Labs continues to have its eyes open, combing if you have seen attackers’s addresses, fine-tuning “cash-out alarms” to arrest further smuggling of cryptocurrencies. This crash is not an isolated case, and other assaults on the cross-chain platform sharing the same cryptographic techniques have occurred. May 17 was the day that a cybercriminal named XLink erased $10 million of the company’s assets, but luckily, it was recovered by a white hacker who returned the missing amount. Both attacks employed proven phishing methods to obtain a private key and conduct undisclosed transfers on crypto platforms.

The preventive step undertaken by the Alex Lab points to the steep protection framework needed to help secure the oncoming threats of exploitation in crypto. The team’s attempt at recovery of the users’ funds and possible compensation for them shows the clear commitment of the community towards the preservation of users’ trust and ensuring the security of the community.

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